KBC negative equity tracker mover . How our savings are allocated?

[Newbie!]

Our PPR is in negative equity of about 60k now (outstanding mortgage of 280k, realistic re-sale value of 220k). We have approx. 60k in savings are now looking to move to a bigger home with a purchase value of approx. 360k.

In my (very limited) understanding, this means that our new mortgage will be for 360k if we use our full savings to write off the negative equity. I would anticipate house sale/purchase costs for solicitor (3k), surveyor (500), Stamp duty (3600) and Estate Agent (2200) –totalling €9300.

So, my question… is that €9300 additional monies which we will require or can we use it from our 60k savings, resulting in 50k being used against our negative equity therefore meaning we will carry 10k of negative equity onto our new mortgage.

Does that make sense?

 

[Brendan Burgess]

Which lender is it?

Have you an SVR or a tracker?

This is the likely outcome in the New Year

House purchase cost| €360k |
Deposit required| €72k |20% proposed new Central Bank rules
Loan needed|€288k
Negative equity transferred|€60k
Total loan required | €348k |97% LTV

Total cash required: €81k ( €72k deposit + €9k costs)

If you are approved before the CB introduces the new rules (or if they relax their rules)

House purchase cost| €360k |
Deposit required| €36k |10%
Loan needed|€324k
Negative equity transferred|€60k
Total loan required | €384k|107% LTV

Total cash required: €45k ( €36k deposit + €9k costs)

 

[Newbie!]

We currently have a tracker mortgage with KBC. Brendan, I understood from reading here before that for those individuals selling a home in negative equity, the NE was written off against the 20% deposit.

 

[Brendan Burgess]

Brendan, I understood from reading here before that for those individuals selling a home in negative equity, the NE was written off against the 20% deposit.

That really doesn't make any sense to me.

I have set out the KBC tracker mover product here

http://www.askaboutmoney.com/showthread.php?t=187758

And a specific example here

http://www.askaboutmoney.com/showthread.php?p=1395531&posted=1#post1395531

Brendan

 

[Sarenco]

From the Central Bank's consultation paper:

"Credit granted for the purpose of discharging residual debt under a negative equity mortgage is excluded from the calculation of the LTV. The LTV limit will only apply to the loan secured on the new property, before the residual debt is applied. The residual debt which can be exempted only applies if the property sold is a primary dwelling."

However, you would still need a deposit of 20% of the new house purchase price (as per Brendan's first example above), assuming the CB introduces the proposed new LTV rules.